Supply Chain Comment: Trip Report - ProMat 2017 eCommerce Dominates the Show, with Aisle after Aisle of Piece Picking Systems; Where Did Automated Case Picking Go?

I am just back from two days at the ProMat 2017 show at the sprawling McCormick Place convention center along Lakeshore Drive south of downtown Chicago, where materials handling editor Cliff Holste and I spent a hectic couple of days pounding the show floor and looking for cool and interesting new solutions we could bring to SCDigest readers. You will find what caught our eye in our video review and comments for Day 1 and Day 2, which usually include videos of each of these different hardware and software solutions we call out. Thousands of you have already viewed these videos - there is nothing else like them in the industry, recorded under some duress at the end of each day right on the show floor and all editing that same night - I encourage you to take a look.Just as some quick background, ProMat is a massive show managed by MHI (formerly the Material Handling Industry of America) that runs bi-annually in Chicago in odd number years. In even years, there is a similar but slightly different show called MODEX in Atlanta that MHI launched a few years ago. At ProMat, material handling-related systems of all kinds for distribution and to a lesser extent manufacturing dominate the aisles, though there is plenty of supply chain and logistics software there too. The materials handling side covers a very broad and diverse array, from fork truck battery charging systems and all sorts of casters for carts and more to completely automated distribution centers and increasingly sophisticated robots of all sorts. More on all that in just a bit. As a side note, in recent years, for a variety of reasons, the materials handling automation market has been strong, somewhat defying its normal very cyclical nature. This has led to strong demand for space at both ProMat and MODEX, bolstering MHI's financial picture, and in part allowing the organization to invest in other areas, such as its annual conference, which it is trying to build into a more main stream supply chain event. As evidence of that market strength, once again this year ProMat was held in conjunction with another show called Automate. We walked across the lobby area to that show on Tuesday, and while we found a number of robotic vendors there as you would expect, half if not more of the space was taken up by vendors that had not much to do with automation per se, and which we we suspect were overflow vendors that couldn't secure space in the main ProMat hall, and were offered spots in Automate as a fallback. It often takes Cliff and me two days to identify the broader show themes and trends, and that was the case again this year, even though the main one was staring us in the face on day 1. I will start this way: as much of an impact as we all understand the growth of ecommerce is having on supply chains, we are still underestimating that impact. At ProMat 2017, the show revolved around ecommerce. Not that many years ago, Cliff and I came back from a ProMat show touting the theme of "automated case picking" or what we called ACP. We were close then, we said, to a sort of Holy Grail of distribution - affordable solutions to automating the picking of individual cartons, using a wide variety of different approaches. Much of the focus was on the beverage industry, with the thought that success there would then lead to opportunities in consumer packaged goods, retail and other sectors. It was exciting stuff - and almost totally absent from this year's show. If you came looking for automated case picking technology, you would not have found much on this year's show floor. Is that because the adoption of ACP is just going very slowly? I am not sure. But what I do know is that if you were looking for automated piece picking systems, you were likely to feel like a kid in a candy store - though possibly even more overwhelmed. There was aisle after aisle of piece picking systems, from partially automated (e.g., many "goods to picker" systems) to fully automated. All this of course driven largely by ecommerce, and the resulting need to pick and pack individual items, not full cases. So called "piece" or "eaches" picking has been around for decades, or course. What is changing it that ecommerce is driving the volumes of eaches picking for many through the proverbial roof, and/or causing some companies, such as consumer goods manufacturers and some retailers, to do eaches picking for the first time. Piece picking is also expensive operationally - and those costs are contributing to the challenges many consumer goods firms and retailers are having becoming profitable in ecommerce channels. So piece picking systems were everywhere, dozens of them. I will make a couple of comments on that: First, I am not exaggerating much when I say the technology to grab individual items and put them in a carton or tote has largely been solved. There were many systems at ProMat doing that robotic piece picking successfully at high rates of speed. What's more, the challenge now is really not so much the physical grabbing (including actual gabbing, vacuum systems, etc.) but in the vision and software systems to speed up the picking process and improve accuracy - and progress in those areais occurring at a rapid pace. All that means that for most companies, the issue will not be whether there is a robotic system that can do eaches picking for your products, which was the main question just a couple of years ago. The questions instead will be around what the total system design will be, what will be the replenishment and takeaway systems look like, how much do you need to spend and what is real ROI from the investment, etc. On the Day 2 video, Cliff also noted a couple of key issues: (1) Every system has down time - should you/can you have a manual (human) back up in case the automated picking system fails? This is a tougher question than it might seem; and (2) Companies investing in these systems will have to staff or source technologists that can keep these robots running on both the hardware and software fronts. They don't have these people today. My second observation is that there are now so many choices that it will be a significant challenge to find and sort through all the alternatives. I could say it another way: no one will have time to look through all the options in technology and vendors, so good luck. I have some ideas on what SCDigest could do to help in that regard, so stay tuned. In terms of the overall show themes, another one is the escalating battle between traditional Warehouse Management System (WMS) providers and Warehouse Control System (WCS) over which software will control the overall picking process. A growing number of WCS providers say most WMS systems today do not optimize that process very well, especially if automation is involved, and are throwing "data science" at the problem to improve results. We are also starting to hear the term "Order Execution System" to describe a new class of software that is focused on the most effective way to pick and pack. More on all this soon. Finally, a minor theme at the show is the slow but steady growth Chinese equipment and system manufacturers trying to enter the US market. There were many booths from such vendors - far more than the last ProMat - often ganged together in a row of simple 10 x 10 booths, and generally featuring very basic equipment like carts and shelving, with confusing and even sometimes accidentally funny signage. But no doubt those offerings come with aggressive pricing, and a few of the vendors were displaying more sophisticated equipment. Notably, in one of the major announcements connected to the show, well-known consulting firm Tompkins International surprisingly announced it had become the sole North American distributor for a new line of small AGV robots from China that are used in a very interesting system for - what else - piece picking. US and European materials handling vendors beware - the Chinese competitors are coming.